You want to buy a $320000 home. You plan to pay $32000 as a down payment, and take out a 25 year loan at 4.5% interest for the rest. After 5 years, you decide to pay off the entire loan.

a) What is the amount of the payment?

b) What is the outstanding principal after 5 years?

c) If the bank charges 3.5 points on the loan, what is the amount charged for points?

If the bank charges 3.5 points on the loan, what is the true interest rate?